Failed Technologies:

In this report on my researched topics I have tried to focus on 3 main areas:

·	Why the technology failed in the first place
·	What could have been done to stop the technology failing
·	Whether it could have been predicted that this technology would fail at the time or today



Satellite Phones - The Iridium Network
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The late 80’s saw the importance of communications starting to take a priority in business. The first GSM mobile phone had been launched, and in 1987 Motorola decided to take the first step to making it possible to communicate to anywhere in the world with a single device.

Motorola spent over $7 billion on the network of satellites, believing that it would be possible to attract over 1 million users to reach the break even point. This is probably the first mistake made by Motorola, in there conception of the technology. The business plan may have seemed sound at the time, because GSM networks did not integrate across countries, GSM phones were bulky like Satellite phones, and the cost of using them was high. A phone which offered so much more coverage looked obvious to be the successor to the GSM phone, and for what people wanted.

However there were also other problems that led to the initial failure of satellite phone technology. One of the most obvious being the way the system worked. Similar to GPS, the phones did not work inside any type of building. This made it particularly annoying for the user, who had to endure the outside weather to get a signal, while GSM phones had no such problems.

The other major contributor to the failure of the technology was when GSM roaming was introduced in the 90’s. GSM phones were already substantially smaller and cheaper, due to the higher demand from consumers, and therefore Iridium seemed doomed. Most people could get coverage abroad in first world countries with their dual and tri band phones, while the only use for satellite phones was on ships, or areas outside GSM networks such as remote islands or developing countries. The latter inhabitants not being able to afford even a GSM phone there was no chance of being able to afford a sat phone.

By 1999, Iridium had ceased trading attracting only 55,000 customers, and had it not been for the US government heavily subsidising it the satellites would have been allowed to be destroyed on re-entry. Essentially the project and the technology had been a massive failure and would no longer exist if it had had no military use.

So what could have been done to stop this massive failure? As mentioned before people were not impressed by the higher price and bulkier handsets on offer for satellite phones. A possible solution would have been to have concentrated on ensuring that the user interface to this impressive technology was on an equal footing to its biggest rival the GSM phone. This would have been difficult with low demand, but might have helped sort out the problem of a lack of users.

Another possible solution would have been to have reduced the cost of the calls and use of sat phones. Again this is a difficult solution to implement because the overhead costs for the network were extremely large, and needed to be recouped, so that the network could keep being enlarged. Maybe the company could have concentrated on its military users, and expanded by securing two systems using the same satellites: a secure system for the military and a non-secure version for the general public. A contract with the military from the start may have helped a great deal, since they had the expertise and facilities to launch satellites at a greatly reduced price, and this could have made a potentially viable case for reducing costs for the general public, so that they would choose a sat phone rather than a GSM phone.

However to most home users especially the public in the UK the need to phone people from remote areas is rather limited, especially due to the rapid increase in GSM phone systems. The added problem of limited battery life, due to the large amount of power required for satellite communication rather than low power microwave transmitters as in GSM didn’t help the cause. Had the GSM phone market not been so successful in attracting users through its cheap, small handsets and cheaper calls, potentially we could all be using satellite phones today.

Could it have been predicated that sat phones would never reach their potential and require a huge bail out from the US government to survive? This is probably the most difficult question to answer and justify. Realistically I don’t think that Motorola could have predicted the huge failure that would occur when they launched their service in 1987. So many circumstances changed so quickly and the growth of the electronics industry would have been extremely difficult to predict which had a huge bearing on the success of the GSM network. The need for communicating to people across the globe was a growing area, and this can be clearly seen by the invention of the fax at the time to complement the telex machine, so the natural progression to being able to contact someone anywhere was generally a good progression.

With this in mind a business plan of 1 million worldwide users to break even sounds fairly sensible considering GSM hadn’t taken off, and roaming hadn’t even been thought about. The technology appears to have been fairly reliable, although bulky and expensive, and at least the network did not suffer from huge areas of signal black spots like the GSM networks did until they took off in the mid 90’s, and were able to afford massive expansion with more microwave masts across the developed countries.

Possibly the risk of launching so many satellites at the start of a project could be considered a huge risk, because of the high maintenance and set up costs for a satellite, but this had to be done to create a viable network to make money to fund the expansion. Essentially I think it was probably more the huge advances in electronics that helped the GSM networks flourish and the cheaper running costs that were against the Iridium network, and neither of these could have been accurately predicted back in the early 80’s when Motorola first conceived the idea of a global satellite phone network.

The final question to be answered is whether if with hind sight the satellite phone technology could have been a success. The answer to this is probably “yes”. Knowing what we know about GSM phones and communications today, it would be likely that the sat phone industry could have succeeded if it the project had been managed properly. By spreading the cost of the network by allowing other users such as government defence agencies to be partners, and by spreading the risk of the project with other communication companies Motorola may have been able to have created a winning product. The technology and idea were sound, but it was the implementation of it that caused the failure of the end product, and letting the GSM network take over in the struggle to be one of the leaders in worldwide communications. 

http://www.guardian.co.uk/Print/0,3858,4132567,00.html
http://news.zdnet.co.uk/story/0,,t269-s2104201,00.html
http://www.iridium.com/
http://www.motorola.com/